UB group to sell 10.27% stake in Aventis

Vijay Mallya’s United Breweries (UB) Group is exiting its holding in Aventis Pharma Ltd (sanofi-aventis) by selling a 10.27 per cent stake in the company, in a deal worth Rs 414.11 crore. However, Mallya will continue as chairman of Aventis Pharma.

Hoechst GmbH, a 100 per cent subsidiary of France’s largest drugmaker sanofi-aventis SA, said the deal would help Hoechst consolidate its holding in Aventis Pharma from the present 50.10 per cent to 60.37 per cent and become the sole promoter.

Hoechst will acquire 2,366,380 equity shares held by the UB Group at a price of Rs 1,750 per share. Foreign Institutional Investors (FII) hold 7.57 per cent stake, mutual funds and UTI (14.37 per cent) and corporates hold 5.73 per cent of the Rs 1,056 crore plus Aventis Pharma, as per the shareholding pattern as of 31 December 2009.

UB Group’s shares in Aventis are held by Kingfisher Finvest India, United Breweries Holdings, McDowell Holdings and Mallya Private Ltd.

However, Mallya, chairman of the UB Group will continue as chairman of the Board of Directors of Aventis Pharma, a sanofi-aventis Group spokesperson told Business Standard in an e-mail from Paris.

He also said the acquisition was conducted as an inter-promoter transfer, and was not part of a plan to de-list the company from the Indian stock exchanges.

“India is an important market for the sanofi-aventis Group. The co-promoters’ decision to exit Aventis Pharma Limited’s capital has provided the sanofi-aventis Group with an opportunity to consolidate its presence in this high-growth market,” he said.

Various entities controlled by the UB Group are expected to sell the stake on or after March 30, said Aventis Pharma.

UB Group’s association with Aventis began during early 1960s, when the late Vittal Mallya joined hands with Hoechst AG of Germany to co-promote then called Hoechst Pharmaceuticals Ltd, which was later renamed Aventis Pharma India.

Currently sanofi-aventis owns the company, following the merger of sanofi with Aventis a few years ago.

Mallya will use the proceeds of this sale to retire a part of the Rs 1,600 crore debt in UB Holdings Limited, which holds significant stakes in United Breweries, United Spirits and Kingfisher Airlines. UBHL has also pledged substantial stake to raise debt for United Spirits and Kingfisher Arlines, said sources.

According to UB Group sources, Mallya will increasingly look at exiting from non-core businesses and focus on alcohol beverages and airlines business, going forward.

UB Group also owns a fertiliser firm, Mangalore Chemicals & Fertilisers, and the management has been stating that it will be for sale provided that there is a proper price, post the pending subsidies from Centre, which itself is close to Rs 400 crore.